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Twitter approaches TikTok for a potential deal in the US, says report

After Microsoft's ongoing negotiations with TikTok, Twitter approached TikTok to work out a potential deal.

twitter-logoIndia Today Tech | August 10, 2020 | Updated 11:54 IST
(Source: Reuters)

Highlights

  • Reports have stated that Twitter approached TikTok to work a deal around its US operations.
  • Analysts have however stated that a deal is highly uncertain, as Twitter lacks financial backing.
  • Sources from Twitter have said that Twitter is likely to face less scrutiny from regulators.

Twitter has approached ByteDance's TikTok to work out a possible combination in the US. However, analysts have said Twitter does not seem to possess the kind of financial backing for a deal with TikTok and so it is highly uncertain. A report by the Wall Street Journal first stated that Twitter was in preliminary talks for a potential deal with TikTok's US operations.

As of now, Microsoft is already in talks to work out a deal with TikTok globally in at least four countries including the US, Canada, Australia, and New Zealand.

Twitter has also privately made a case that its bid would face less regulatory scrutiny than Microsoft's. Twitter also noted that it will not face any pressure from China given that it is not active in that country, sources told Reuters. It is far from certain that Twitter would be able to outbid Microsoft Corp and complete such a transformative deal in the 45 days that US President Donald Trump has given ByteDance to agree to a sale, the sources further said. One of Twitter's shareholders, private equity firm Silver Lake, is interested in helping fund a potential deal, as per the report.

US President Donald Trump has given TikTok's parent company Byte Dance an ultimatum of 45 days till September 15 to sell the company. Trump has also signed an effective order barring transactions with ByteDance after the deadline. A similar order targets Tencent-owned messaging app, WeChat.

"The spread in the United States of mobile applications developed and owned by companies in the People's Republic of China continues to threaten the national security, foreign policy, and economy of the United States," the executive order reads. "At this time, action must be taken to address the threat posed by one mobile application, in particular, TikTok."

TikTok in response to the executive order in a blog post said, "We are shocked by the recent Executive Order, which was issued without any due process. For nearly a year, we have sought to engage with the US government in good faith to provide a constructive solution to the concerns that have been expressed. What we encountered instead was that the Administration paid no attention to facts, dictated terms of an agreement without going through standard legal processes, and tried to insert itself into negotiations between private businesses."

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